Netflix signs lease for new Los Gatos development

Christmas came early this year for developer John Shenk, who said he is thrilled that Netflix signed a lease for space at the new business park he's planning to build on Albright Way and Winchester Boulevard.

The lease is for 140,000 square feet and would allow Netflix to occupy the first building that's completed, he said.

"It includes options for them to expand across the property into the other planned new buildings," Shenk said via email. "The lease gives Netflix the right to cancel if we are not able to meet particular milestones in the entitlement and construction process. Appropriately, they need to know when they will be able to occupy the new space."

At this point, it's not known when that might happen because the project's environmental impact report won't be finished until next year. The draft EIR must then be vetted by the planning commission and town council.

The development project has been downsized since Shenk's first proposal was brought forward in 2011. As it stands now, there would be four 65-foot-tall buildings, making them almost identical in height to the existing Netflix building at 100 Winchester Circle.

"The redesigned project is fantastic," Shenk said. "It incorporates many comments and suggestions we heard during the previous entitlement process and reflects the current best practices to meet the needs of the best companies."

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The Albright project is considered a high-end, Class A commercial office space development.

"Albright Way is the natural site in Los Gatos for Netflix because it is adjacent to our current site and would allow us to stay in the community that we have been a part of for over 10 years," Netflix spokesman Joris Evers said.

Netflix has approximately 1,000 employees working at the Winchester Circle headquarters.

The proposed project has proved controversial, as many residents rose in opposition to the five-story buildings that were originally proposed. Residents questioned the town's assertion that an EIR was unecessary for the site and took the town to court.

The EIR that is now under way was court-ordered. It is studying traffic, noise and recreational impacts, as well as aesthetics.

"We will process a full and complete EIR, planned development zoning and an architecture and site application," Shenk said. "We hope the community engages with us and supports the approval in a timely manner so we can keep Netflix, meet their needs for growth and keep the benefits within the town."

Even though Netflix DVD rental sales tax revenues are drying up, it's new lease commitment is important to Los Gatos because the town estimates the Albright development could bring as much as $1 million annually in property taxes to local schools.

"This improved tax base is what the school districts can use to support their bonds and improve their bonding capacity, which will directly help them provide the educational environment the community seeks," Shenk said.

About a month before the draft EIR comes up for a public hearing, cherry pickers connected by netting will be placed at certain points of the Albright site so residents can better gauge proposed building heights and placement. Drawings of the proposed buildings have been drafted already, with Shenk saying, "It is a beautiful project inspired by the town's new library."